January 06, 2011

eBay for iPhone - Why It Almost Didn't Happen

eBay announced today that the sales through eBay mobile for 2010 hit 2 billion dollars, which translates to more than 200 million in revenue for the company. The majority of mobile activity comes from the eBay iPhone app, while the rest comes from the mobile website and apps on other platforms. eBay Mobile now represents one of the few bright spots for the company, but what is most amazing is that it almost didn't happen.

eBay has had mobile apps and a mobile web version for years. As little as 3 years ago, all mobile app development involved testing applications on dozens of different phones and negotiating distribution deals with carriers. The eBay mobile app strategy back then was to partner with Bonfire Media -- they had already written an app and eBay helped get them additional distribution deals and then took a percentage of the revenue (users had to actually pay for the app). As for the mobile website, it was a WAP site, which is the same as saying that it sucked. Of course these hurdles were too much for most users, and the amount of purchases flowing through either the website or the apps were not enough for eBay to publicly disclose any numbers.

This all changed with the iPhone App Store. I was working in the "Disruptive Innovation" group at eBay, and when the App Store was announced that spring, I immediately applied for a developer license and was lucky enough to be in the first group of developers given access. As far as I could tell, no one else in the company had access yet, and I spent about 36 hours straight developing an eBay iPhone app prototype for an innovation content we were holding later that week. The app was just a prototype, but it did work - you could search all of eBay and browse your My eBay items, and because it used standard iOS components it looked great despite being thrown together in a very short time. The app impressed the judges and attendees when it was demoed at the innovation event - the iPhone SDK was so new that any custom app, let alone one that did something even modestly useful, was impressive. (One judge, Michael Arrington of Techcrunch, was so impessed that he actually approached me afterwards and proposed that we create a social networking app. We had set up a meeting, which he then cancelled after he saw a demo of Loopt, which had already built the app he wanted to build.)

I kept working improving the prototype in my spare time, and met with the eBay Mobile team to discuss how we could get a real version of the app built. The team had previously decided to not invest in building out an iPhone app, and to instead focus on improving the mobile version of the website. Luckily, one of the product managers on the team, Ken Sun, did take the opportunity seriously and he took responbility for getting a contact at Apple and finding others who could work on the project - all in our "spare time", of course. There was exactly 1 person in the whole of eBay who seemed to have any development experience with Objective C, Rick Hoiberg, and he was overjoyed to get a chance to work on coding the backend. But it was clear that we would need help especially with the frontend, and our contact at Apple got us in touch with Critical Path - the same company who has continued to develop the majority of the eBay iPhone app ever since then, and which was just acquired by eBay.

With a small team of eBay employees and an outside development firm lined up, we had just weeks to create the application to get it done in time for the App Store launch. We were able to pull together an attractive, workable demo in time to get it demoed on stage at WWDC when the App Store was announced. (You can watch Ken and me demoing the app on stage).

The importance of this event can not, I think, be overstated. Every company that built apps that appeared in the keynote worked extremely hard, not just on the apps themselves but also preparing for the on-stage demos. And the companies that presented have all been treated well by Apple since, with spots in television commercials, ads promoting the app store, and placement within the app store itself. eBay could have taken a "wait and see" approach, as the eBay Mobile team had wanted to do, but it wouldn't have had the momentum that started from day 1 of the App Store launch, wouldn't have had the talent (Critical Path), which became extremely hard to come by after the success of the App Store became clear, and it may not have received as much free promotion from Apple.

While the Mobile team did drag their feet, I do give them credit that they came around quickly, especially once they saw the early success (if I remember correctly, the eBay iPhone app accounted for over 20% of all mobile traffic within a week or two of the app's release). But the eBay executive team took far longer to come around. In late 2008, after I had left the company, most of the eBay Mobile team was laid off or re-assigned to other parts of the company. Executives wanted to focus on the "core" of the business, and eBay Mobile was evidently not considered "core". (I'll note that this information comes second-hand, but it does jive with my personal experience with the company and their lack of product vision and leadership.) Even the execs have come around though, and the team in charge of eBay Mobile has made some great moves, especially the Red Laser acquisition. But it is incredible to think about how the project could have never happened, or at least not have had the impact it did.

I would say push notifications is one iPhone app advantage. Another would be scanning barcodes to look up UPCs on eBay (e.g. RedLaser). And third, the streamlined ability to use the integrated iPhone camera for eBay listing as a seller.

Amazon is racing ahead of eBay and I feel like eBay is not even on the track any more.

Alan's got it right. Unfortunately, this recounting is exactly as I remember it. If not for the dedicated few people (and their managers that provided aircover) during it's first year--it wouldn't have happened.

We had a QR Code reader program installed for our mobile phone trial project. I have lots of Computing quotes in QR Codes as posters round my classroom. I gave some to Science and Modern Languages but they didn't understand it - "looks pretty, what is it?"